EQT Corporation (EQT), an integrated energy company with an emphasis on natural gas supply activities, recently posted better-than-expected first quarter 2010 results. The quarterly earnings of 65 cents a share outpaced the Zacks Consensus Estimate of 58 cents and rose 18% from 55 cents delivered in the prior-year quarter.
Operating revenue for the quarter dropped 7% year-over-year to $436.6 million while operating income rose 24% to $169.1 million, due primarily to 20% lower operating expenses.
Segment Details
EQT Production’s first quarter operating revenue increased 32% to $129 million, reflecting a 31% rise in sales of produced natural gas and 2% increase in wellhead natural gas prices. Management predicted total sales of produced natural gas to be 126 Bcfe in fiscal 2010.
Operating income rose 32% to $58.5 million. Total operating expense for the quarter soared 32% to $70.5 million. Exploration expense for the quarter dropped 60% to $1.3 million. During the quarter under review, 108 gross wells were drilled, of which 77 were horizontals.
EQT Midstream’s realized operating income of $67.3 million was up 37% on an increase of 26% registered in total net operating revenue of $116.8 million. Net processing revenues surged 243% to $22.7 million, driven by a 72% rise in NGL (natural gas liquids) prices and a 21% increase in liquids volume. Net gathering revenues and net transmission revenues increased 26% and 9% to $48.7 million and $21.6 million, respectively. Total operating expenses jumped 14% to $49.5 million.
EQT Distribution’s net operating revenue rose 9% to $76.8 million. The company earned operating income of $47.4 million, up 8%, while operating expenses climbed 11% to $29.4 million.
EQT generated operating cash flow of $204.8 million during the quarter compared with $174.2 million earned in the prior-year quarter. Capital expenditure for the quarter was $217.1 million.
EQT has been experiencing growth in natural gas sale volumes. Increase in produced natural gas sales represents the seventh consecutive quarter of double-digit growth.
We are currently Neutral on EQT Corporation.
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